CEA says it doubts sustainability of Chinese power equipment

New Delhi: The Central Electricity Authority, or CEA, the top power sector planning body, says it has doubts about the long-term sustainability of Chinese power generation equipment, though it is yet to receive the information it sought from Chinese manufacturers for a technical audit of their products.

“We are not very confident about the long-term sustainability and desired output of the Chinese equipment,” said a CEA official, who asked not to be named.

The audit started after complaints of Chinese equipment malfunctioning. For instance, one of the turbines supplied by Dongfang Electric Corp. for West Bengal Power Development Corp.’s 300MW Sagardighi project failed.

CEA had asked Dongfang Electric and Shanghai Electric Group Co. Ltd to provide information on changes incorporated in equipment to operate on Indian coal, said another CEA official, who also requested anonymity.

“We are still awaiting replies,” said this official. “If we do not receive the replies shortly, we will go forward and submit the (audit) report.”

Dongfang’s chief representative in India, Wen Ya, said: “We are preparing the answers and it is under process. We plan to submit them shortly.”

Questions emailed to Shanghai Electric went unanswered.

The review comes on the heels of the Centre initiating plans to restrict overseas equipment makers from bidding for domestic projects unless they have a manufacturing base in the country. It has assumed significance as Indian companies have already placed equipment orders with Chinese firms to generate about 20,000MW of power.

The concerns have already led to domestic lenders stopping loans to projects having Chinese equipment, and the government deciding not to supply coal from state-owned mines to electricity plants with foreign equipment which have a unit size of less than 200MW.

“We have been getting a lot of queries from financial institutions. They are awaiting the report,” said the second CEA official.

Mint had reported on 5 August that CEA had formed an internal group to conduct a technical audit of Chinese power generation equipment because of alleged poor quality. “There has been a general concern about whether the Chinese machinery compromises on quality as it is competitively priced. This audit is a good thing and will prove/disprove this notion,” Kuljit Singh, a partner at accounting firm Ernst and Young, had said.